Introduction

China’s Social Credit System (SCS) is a multifaceted project introduced by the Chinese government to:

• build trust in governmental, social, judicial, and corporate affairs;
• stimulate development in various areas, including the ‘socialist market economy’; and
• engender social governance and harmony.[1] 

The SCS has attracted significant attention in recent years, and the complexity and uncertainties of the system have led to confusion on what it entails. Despite the singularity hinted at by the term, the SCS encompasses multiple systems, including those managed by government authorities and private companies. The full working paper explores the SCS via three questions:

• How far is the SCS from being a smoothly operating, holistic, and complete system?
• What is the role of data and surveillance practices in the operation of the SCS?
• What influence might the SCS have outside of China?

The deliberation of these three questions is the culmination of a literature review on the SCS, with a particular focus on the three questions above, and interviews with ten experts who have explored the SCS from various dimensions, including law, security, economy, and the use of technology in governance.

How far is the Social Credit System form being complete?

Per the literature review and interviewee accounts, the SCS is not a smoothly running, holistic mechanism, as of the writing of this working paper. It is a work-in-progress that is fragmented between the local and central governments regarding the interpretation of policies and implementation of SCS pilots in different localities. In addition, there are also social credit systems run by private companies, and collaboration between the government and private companies in this regard is a question debated by scholars and analysts. Various uncertainties plague this debate, especially those in the areas concerning data and information exchange. Further, data sharing, collaboration, and bureaucracy-related issues raise questions on the current and future trajectory of SCS.

The role of data and surveillance practices in the operation of the SCS

Matters of data management and analysis involve questions on data sharing, privacy, and security. Regarding surveillance, some see SCS as an addition to China’s surveillance capacity, while others suggest surveillance is a broader issue that intersects with the SCS, particularly in the area of law enforcement. The discussions covered in this chapter often stretch beyond the scope of the SCS and with that demonstrate the challenges to carving the SCS out of the broad and complex deliberation and concerns on data management/analysis and surveillance. The paper delivers various important insights on (1) data management and analysis and (2) surveillance, summarised below:

Data Management and Analysis: The debates concerning data management and analysis capabilities—including questions concerning data sharing, privacy and security—do not depict a system that is at the peak of automation and predictive analysis, and one that is guarded against privacy and security constraints. While there are developments on the data sharing, privacy, security, and analysis fronts, challenges remain, some of which expose risks and vulnerabilities. However, this does not mean that there is no room for development, and thus the areas identified in this research call for close observation.

Data Sharing: There have been advancements on data and information sharing capabilities among government bodies. However, as per the interviews and literature, there are data[2], technological capacity, and regulation-related disparities, as well as differences in conditions and practices at the local level. Regarding the data sharing between the government and corporations, and among companies with SCS schemes, interviews suggest that it is essential to differentiate between four information flows in question: (i) commercial credit programmes making use of government information (e.g., blacklists); (ii) companies sharing law-breaking behaviour occurring on their platforms; (iii) sharing social credit scores of users; and (iv) companies sharing SCS-related data on users. The degree of information and data exchange between the government and companies is a debated issue that raises more questions than answers.

Data Privacy: In the literature, some see an increase in citizen attention to data privacy issues,[3] some suggest citizens attribute different levels of trust to different government authorities with handling their personal data,[4] and some argue that the concerns about the risk of exploitation of data by companies fall behind worries such as government surveillance and prioritisation of their own interests.[5] Interview accounts had parallels with the literature while some interviewees also noted contextual differences in the concept and expectations of privacy. Issues, including the variance in privacy policies at local and national levels, worries about the data privacy of foreign entities and individuals engaging with China, and the risk of online privacy violations (e.g., identity theft) targeting the SCS, are likely to remain relevant in the near future.

Data Security: The risks raised in the literature and by interviewees in this regard include hacking, identity theft, ease in accessing personal data and the risk of manipulation of SCS-related data, which could amplify as the SCS evolves and more data get accumulated and linked.[6] The discussions on security problems, including cybercrime and threat of intrusion, concern how existing problems could spillover to the SCS.

Data Analysis: In the literature, some suggest that the national SCS is not at the level of a system that could pursue automated decision-making,[7] while others, including some who believe the SCS is currently not at that point, see a more technologically advanced system as a future possibility.[8] The interviewees question current abilities, with some suggesting companies are better equipped than the government on this front. Data nature (e.g., what is included and excluded in SCS data sets) and data quality (e.g., data richness, variance in data quality across localities, and difficulty of maintaining data quality) are some issues raised by interviewees that could also inform data analysis capacity. In addition, the impediments to data sharing, including the questions concerning infrastructure and willingness to share, could also arise as issues. Problems with using algorithms and the question of automated scoring also appear in discussions. 

Surveillance: Some interviewees and literature warn against conflating the SCS and surveillance, some see it as an addition to China’s surveillance toolkit, and some expand on the intersections, especially in the area of law enforcement.[9] The existence of surveillance technologies in a global supply chain finds voice in some interviewee accounts. China’s growing surveillance capacity, and the extent of surveillance practice in China hint at contextual concerns with regard to the employment of surveillance technologies. More importantly, discussions of the interviewees suggest surveillance is a broader issue that is more concerning than the SCS.

Influence the SCS might have outside of China

The debates in the literature and accounts of interviewees on the potential reach of the SCS outside of China mostly see exact duplication of the SCS in other countries as an unlikely option. However, some question the various routes through which the SCS could influence or cause concern among other countries and non-Chinese entities, with several reservations that are outlined in the working paper. These potential avenues for influence include influence via and over companies (foreign and Chinese); influence over individuals (e.g., foreigners in China and diaspora); channels of influence that intersect with, yet cannot be reduced to, the SCS, including the export of surveillance technology and influence of artificial intelligence (AI) and data-related practices. There are also scholars, analysts and interviewees who warn of the rise of the SCS, or technologically-advanced authoritarianism, as a model that other countries, particularly authoritarian-leaning ones, could imitate.[10] The accounts of some interviewees hint at underlying concerns around the global dynamics of capitalism, surveillance —more importantly, the repressive use of related technologies— and China’s legal and political system. Existence of similar credit or ranking systems in different countries and the question of what sets the SCS apart emerge as part of this discussion.

Considerations for policymakers should take into account

In light of the learnings received from the literature review and interviews, it is essential to keep informed and watch developments in areas of concern, including the legal framework governing SCS, and evolution of the Social Credit System in China. Another critical area in need of observation is China’s policymaking process – how national policies are interpreted at local levels, thus, possibly, influencing the national Social Credit System model.[11] It is also necessary to observe, raise awareness, and consider norms around data and surveillance practices that expand beyond the scope of the Social Credit System.

Raising awareness alone might not be of help in environments where there is less opportunity for citizens and independent organisations to challenge the questionable practices of states and companies, and where certain surveillance and predictive analysis practices are carried out in secrecy.[12]  

It is necessary to address various underlying concerns, chiefly the global surveillance market, data-related practices, and worries stemming from China’s legal and political system.

It is vital to be vocal and raise awareness on repressive uses of surveillance technologies and data practices. While doing so, countries have to reflect on the availability and use of such technologies within their own context.

As the competition to set standards in fields such as AI becomes heated, it is essential to agree on norms that propagate the use of related technologies for the benefit of society and prevent their use for repressive purposes. This requires the definition of the acceptable and unacceptable use of these technologies and reflection on domestic practices within one’s own context, being vocal on the use of such technologies in a repressive way, and strengthening cooperation to create and propagate human-rights-centric norms.

Here, a challenge lies in negotiating the needs for, and restrictions to, the use of these technologies with regard to their employment for governance and safeguarding national security. Agreement on norms in the international arena could also face the impediment of negotiating different needs and viewpoints of nations, and, if agreed, how norms could be effectively enforced might emerge as a question.

The discussions on underlying concerns raise the question of the interaction between freedom of expression, information pollution, the collective good, and surveillance in different political systems. The political system and the degree of oversight on the practices of surveillance and credit scoring is an area that calls for further research, especially at a time when approaches to monitoring the population during the COVID-19 pandemic are in the spotlight.

As an interviewee suggested, the adoption of a system similar to the Social Credit System is a political decision. This hints at the need for a healthy process of checks and balances, a venue for citizens to raise their concerns, and decision-making mechanisms that uphold human rights.  

Conclusion

The Social Credit System is an evolving project, with developments and challenges occurring simultaneously in the areas of data management and data analysis, as well as surveillance. It is vital to stay informed and keep an eye out for any developments in the areas of concern regarding the Social Credit System, including the Social Credit System -related legislation(s), the use of surveillance technologies, and data policies.

Moving forward, the conditions that might have an influence on perspectives on and approaches to the Social Credit System include —but are not limited to— the rivalry between the US and China, especially in the area of technology and a growing use of surveillance technologies and the market around it.

This study involved semi-structured interviews with ten experts conducted between March 2020 and early July 2020. The researcher selected the interviewees based on their work on, or related to, the social credit system.